By Richard Vedder
Illinois State University's annual survey of state appropriations for higher education reveal that the 2008 figure is the highest in the past 11 years (and perhaps longer --that is all the data included in INSIDE HIGHER ED's report). Legislators are dropping money out of airplanes again over campuses --with predictable effects, most not positive.
I calculated the annual compounded rate of increase in state appropriations since 1997 was 4.94 percent --above the rate of inflation and population growth in the same period. But to hear state university presidents tell it, the problem of soaring tuition costs is the cause of soaring tuition rates.
Tuition this year is up 7 percent --appropriations are up 7 percent --inflation is one half of that. The story of higher education in America today. Nothing has changed. Legislators don't demand accountability, transparency, evidence of student progress, rate of the return analysis of university research, etc., etc. We are throwing money down a rat hole --and the rats are loving it.
As long as money is dropped out of airplanes in increasing amounts over campuses with little accountability, there are no incentives for universities to grow up, to rationalize, to economize. The economic rents keep accumulating and the students keep paying out more and more --more a product that’s value derives largely from the information costs employers face in learning about the true capabilities of their applicants. The diploma is worth hundreds of thousands --but is the education behind it truly that valuable?